Court Dismissed Minn. Stat. § 559.01 Claims

The court in deciding Lubbers v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. (D. Minn., 2013) dismissed plaintiff’s claims.

Plaintiffs sought to invalidate the foreclosure of the mortgage on their home. Plaintiffs asserted three claims against defendant: (1) quiet-title, to determine adverse claims under Minn. Stat. § 559.01; (2) declaratory judgment; and (3) slander of title.

Plaintiffs alleged the following causes of action:

In count I, plaintiffs asserted a quiet title action pursuant to Minn. Stat. § 559.01, and sought a determination regarding Deutsche Bank’s adverse interest in the Property. According to plaintiffs, in a quiet title action, the burden of proof was on the mortgagee asserting an adverse interest in the property to show that both record title and legal title concur and co-exist at the same time and in the same entity to foreclose by advertisement.

In count II, plaintiffs sought a declaratory judgment under Minn. Stat. § 555.02 that the various assignments of mortgage, notices of pendency, and powers of attorney were all void, and that plaintiffs remain the owner of the property in fee title.

Count III, plaintiff alleged slander of title, plaintiffs asserted that Wilford, acted at direction of Deutsche Bank, drafted and recorded documents that were false and not executed by legally authorized persons, and that Deutsche Bank knew that the documents were false because unauthorized persons executed the power of attorneys and the assignments of mortgage.

As relief, plaintiffs sought: (1) a determination of adverse interest in the Property; (2) a declaration that the sheriff’s certificate of sale, the various assignments of mortgage, notices of pendency, and powers of attorney are all void; (3) a declaration that plaintiffs remain the owner of the Property in fee title; and (4) money damages. Id., Prayer for Relief.

After considering the plaintiff’s claims, this court granted the defendant’s motion to dismiss.

Texas Court Dismisses Claims Centered Around FDCPA and TDCPA Violations

The court in deciding Warren v. Bank of Am., N.A., 2013 U.S. Dist. (N.D. Tex., 2013) granted defendant’s motion to dismiss all of the claims brought by the plaintiff.

Plaintiff alleged that MERS could not assign the note or deed of trust because it was not a party to, and never had a beneficial interest in, the note. Plaintiff further alleged that the note was “securitized”, thus defendant was not the owner of the note or deed of trust and had no right to foreclose on the Property. Plaintiff asserted a claim to quiet title and requested declaratory judgment and injunctive relief to restrain defendant from foreclosing and evicting him from the Property.

Although the complaint did not formally list any substantive claims, plaintiff’s request for injunctive relief contained allegations that may liberally construed as claims for wrongful foreclosure and violations of the Tex. Const. art. XVI, § 50(a)(6)(B), the Fair Debt Collection Practices Act (FDCPA), and the Texas Debt Collection Practices Act (TDCPA).

Plaintiff alleged that the defendant failed to notify him of the pending foreclosure sale, since the foreclosure notice was “returned as undeliverable” by the U.S. Postal Service (USPS). Before filing suit, he sent the defendant a request “for a verification of the debt” pursuant to the federal FDCPA and the TDCPA. Plaintiff believed that pursuant to the FDCPA, the foreclosure could not have been conducted until 30 days had passed after the date he sent his request.

Plaintiff further claimed that the defendant could not foreclose because there were defects in the original loan financing and the original foreclosure order and because defendant failed to “physically post” a copy of the foreclosure sale notice at “the courthouse” where the sale was to take place.

This court considered the plaintiff’s contentions and eventually found them without merit.

Defendants Could Not Show They Were not Debt Collectors as Defined by 15 U.S.C.S. § 1692a(6)(F)

The court in deciding Dias v. Fannie Mae, 2013 U.S. Dist. LEXIS 181584 (D. Haw., 2013) rejected all but one of the plaintiff’s claims.

The court found that the plaintiff’s Haw. Rev. Stat. § 667-5 defective assignment claims against defendants failed because the mortgage gave the requisite authority.

The court found that a claim that no sale could be held pending a Home Affordable Modification Program (HAMP) modification failed because the mortgagor lacked standing. The false mortgage assignment claim failed because nothing showed a publicly recorded assignment was false. Likewise, the breach of contract claim for violating HAMP guidelines failed because the mortgagor had no such claim, no HAMP trial payment plan supported it, and she was not an intended beneficiary of any HAMP agreement between defendants and the U.S. Treasury.

However, the plaintiff’s Fair Debt Collection Practices Act, 15 U.S.C.S. § 1692, claims survived because a defaulted debt was assigned, so defendants could not show they were not debt collectors, under 15 U.S.C.S. § 1692a(6)(F).

Michigan District Court Dismisses Borrower’s Complaint After Failure to Redeem Property within Statutory Period

In Vollmar v. Federal National Mortgage Association, (12-cv-1119, E.D. Mich. 2012), the U.S. District Court for the Eastern District of Michigan, granted the defendant’s motion to dismiss each of the plaintiff’s complaints that sought to invalidate the foreclosure sale of his property and to quiet title. The judge ruled that the plaintiff lacked standing after failing to redeem the property within the allotted period.

In the case at hand, the plaintiff took out a $128,000 mortgage on his property with Countrywide Home Loans, Inc., with Mortgage Electronic Registration Systems, Inc. (“MERS”) as the mortgagee. MERS assigned its interests to BAC Home Loan Servicing, L.P. (“BACHLS”) in a recorded deed on July 23, 2010. The plaintiff defaulted on his payments and BACHLS instituted foreclosure proceedings in March 2011. The property was purchased in a sheriff sale by Bank of America, N.A. (“BANA”), the successor by merger to BACHLS.

The Court addressed the plaintiff’s claims in conjunction with the defendant’s motion to dismiss.

1. The Court held that the plaintiff lacked standing to challenge the sheriff’s sale due to his failure to redeem the property within Michigan’s 6-month statutory redemption period. At the close of the statutory period, title is vested with the purchaser and the mortgagor loses standing to challenge the sale. Rather than preserving his right to challenge the foreclosure sale by remaining in the home, as the plaintiff argued, the Court held that the ownership interest “terminated at the conclusion of the sheriff’s sale,” and the plaintiff was merely an “illegal holdover.”

2. Defendant claimed that the plaintiff’s amended complaint does not contain allegations of “fraud or irregularity” that are sufficient to annul the foreclosure sale under a breach of contract claim. The plaintiff alleged that the defendants were required to demonstrate by whom the foreclosure proceedings were initiated and failed to produce evidence that BANA acquired BACHLS interest in the mortgage. The Court dismissed the plaintiff’s allegations, noting that the Defendant’s motion papers, foreclosure advertisements, and the initial collection letter to the plaintiff each established that BACHLS both received the mortgage interest from MERS and initiated the foreclosure proceedings. In regards to BANA’s role, the Court referenced Texas Business Organization Codes (Tex. Bus. Orgs. Code §10.008(a)(2)(C)), under which BACHLS and BANA merged on July 1, 2011), which established that after the merger of the two companies, BANA acquired all of BACHLS rights, titles, and interests without the need for “any transfer or assignment.”

3. The Court addressed the plaintiff’s slander of title and quiet title claims even though they were abandoned for failure to address them in the response brief. Because slander of title and quiet title “presuppose that plaintiff possesses the ability to establish title” and the Court has already established that the plaintiff’s rights to the property were extinguished at the end of the statutory period, both claims were dismissed.

4. Since the plaintiff failed to allege that the contract left the manner of performance open to the defendant’s discretion, and that the “manner of performance” of the mortgage rested in the defendants hands, an element required to raise a breach of implied covenant of good faith and fair dealing claim, the Court refused to accept the cause of action, citing Meyer v. CitiMortgage, Inc. 11-13432, 2012 WL 511995 (E.D. Mich. Feb. 16, 2012) which stated that Michigan law does not recognize an independent action for breach of the implied covenant of good faith and fair dealing when the contract cannot be construed to imply such a covenant by having left the manner of performance open to the defendant’s discretion.

5. Finally, the Court addressed the plaintiffs “seemingly abandoned” claim of intentional infliction of emotional distress to reassert that “emotional damages are not available for breach of contract” claims. Citing Kevelighan v. Orlans  Assocs., P.C., 498 F. App’x 469, 472 (6th Cir. 2012) which upheld the dismissal of an emotional distress claim in a breach of mortgage contract suit.